The U.S. economy is in reasonably good shape, according to conventional measurements. The official unemployment rate is below 4 percent, and the productivity of U.S. workers is surging. In the last quarter, economic growth was nearly 5 percent, and Inflation has been levelling off. Americans are buying things, throwing parties, and going on vacations.
Last year, economists were predicting a recession. It hasn’t happened, not yet at least. In part, that’s because the United States, like many other countries, is still enjoying a rebound from the worst of the COVID pandemic. Led by India, China, and Indonesia, the global economy is on pace to grow about 3 percent this year, which also provides America with a tailwind.
The major challenge for the United States is the perennial trade-off between guns and butter. Right now, the Biden administration has turned this dilemma of “either-or” into “both-and” by increasing spending on the Pentagon and on priming the pump of the domestic economy. So, now the question is: how long can this increase in spending on both military and non-military sectors of the economy continue?
Since the withdrawal of troops from Afghanistan in 2021, the United States is currently not involved directly in any major wars. …read more
Source:: Institute for Policy Studies